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Lenovo’s Profit Jumps 20% After Fending Off HP, Dell

Bloomberg News

(Bloomberg) -- Lenovo Group Ltd.’s quarterly earnings surged 20% after the Chinese personal computer giant safeguarded its market share against American rivals HP Inc. and Dell Technologies Inc.

Net income rose 20% to $202.2 million in the three months ended September. That compares with the $201 million average of analysts’ estimates compiled by Bloomberg. Revenue increased 1% to $13.52 billion, versus the $13.7 billion average of 10 analysts’ estimates.

Lenovo expects the global demand to “remain volatile amid a complex macro environment,” the company said in a statement, adding that it’s “well positioned to manage complex and dynamic market conditions.”

Lenovo was responsible for nearly a quarter of worldwide PC shipments last quarter, thanks to a strong push in Europe, the Middle East and Japan, according to IDC, an industry research firm. The 17.3 million units shipped helped the Chinese company claim top spot in the market, beating long-time competitors HP and Dell.

But Chief Executive Officer Yang Yuanqing has warned about uncertainty from U.S.-China trade tensions, which could disrupt its global business as well as a supply chain that stretches from North Carolina to Wuhan, China.

Also on Yang’s checklist are plans to revive the datacenter business, which is suffering from sluggish demand because clients tend to cut back on hardware expenses amid economic uncertainty. The smartphone unit could also use a face-lift, as a business that’s shown few signs of growth outside of North and Latin America.

To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum Murphy

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